The Company Town

by Hardy Green

  Then, after the textile depression of 1920 hit, companies cut wages once again. In June 1921, the UTW struck three companies—the Chadwick-Hoskins and Highland Park mills at Charlotte and Cannon’s plants at Concord and Kannapolis. Union leaders worried that victory was unlikely in the midst of an industrywide downturn. But they gave in to the rank-and-file militancy, taking on “some of the strongest mills in the country” because that was where union organization seemed most solid.

  Charles Cannon refused to rescind the wage cuts or deal with the union at all. Instead, he joined with the mayor of Concord to call upon the state’s new and more conservative governor, Cameron Morrison, to send in the National Guard “to preserve law and order.”

  For strikers, hunger soon became a real issue. Union commissaries supplied only a few staples, and as the summer gardening season neared its end, even union stalwarts grew concerned. As the mills reopened in mid-August under the armed protection of the militia, Cannon workers began crossing picket lines and returning to work. Observed journalist Gerald Johnson of the Charlotte Labor Herald: “The overwhelming nature of the mill owners’ victory can hardly be overstated.”23

  All the same, the fat years were at an end for management and labor alike. Overcapacity would continue to plague the industry for decades to come. In New England a long period of downsizing continued, as 40 percent of that region’s textile mills would close during the next decade. The South was afflicted with an oversupply of willing employees: Ever more people abandoned the rural life even as manufacturers installed labor-saving equipment and applied scientific management to squeeze workers ever harder.

  This “stretch-out,” which had workers tending acres of machines at a backbreaking pace, in time sparked a new round of labor troubles. In March 1929, another strike wave began in the small Blue Ridge Mountains town of Elizabethton, Tennessee, and soon thousands of workers from thirteen different mills walked out. In April, workers at the Loray Mill in Gastonia, North Carolina—called “the South’s City of Spindles”—joined in, demanding a $20-per-week minimum wage, equal pay for women and children, an end to the stretch-out, and recognition of their union, the Communist-led National Textile Workers Union.

  The city of Gastonia outlawed picketing, the state sent in the National Guard, and Loray began evicting families from company-owned housing. Through the summer and into the fall, there was a spasm of violence that saw the murder of the town’s police chief, a terror campaign aimed at unionists and union property, and finally the murder of a key union activist.

  The rebellion continued despite the collapse of the Gastonia uprising in September. UTW-led strikes took place in Marion—where six more unionists were shot and killed—in 1930 and 1932, in Danville and High Point. Everywhere unions were met with force and crushed, although there were some gains such as shortened workweeks at Gastonia and Marion.24

  Then in 1934, the UTW declared a general strike of all textile workers. The New Deal’s National Industrial Recovery Act had encouraged unionization, at least rhetorically. The voluntary National Recovery Administration (NRA) textile industry code of fair competition, facilitated by that law, said all companies should provide minimum wages of $12 per week ($13 in the North), limit the workweek to forty hours, and discontinue the use of child labor. But nothing in these restrictions prevented a further stretch-out, which required workers to perform as much work in eight hours as they had before in twelve. Many companies experienced impressive profits despite the Depression. “The Blue Eagle has learned to cover a multitude of sins since he alighted in the Piedmont area,” one Cannon worker wrote to NRA head General Hugh Johnson, referring to the agency’s avian symbol. In the end, it was all too much, and UTW delegates to a national convention voted for the massive walkout to begin on September 1.

  Across the country, perhaps as many as 325,000 textile workers struck. It became the largest labor conflict in U.S. history to date. Flying squadrons of cars and trucks crossed the countryside, going from one isolated mill town to another, forcing a great many plants to shut down. But the strike was hardly totally effective. In Gastonia, throngs of angry millworkers paraded through the streets, some threatening to confiscate the property of the respectable citizenry. In Durham, energetic strikers were highly effective in shutting down operations—but in Burlington the strike failed to take hold. In Concord, pickets closed four plants—but in Kannapolis, Cannon Mills continued to run uninterrupted, despite the appearance of three hundred pickets on September 10.

  All in all, the action closed around two hundred North Carolina mills, while more than three hundred remained open. In response, the state governments of the Carolinas called out 14,000 National Guardsmen, and Georgia declared martial law. In Kannapolis, a contingent of the National Guard was billeted at Mary Ella Hall, the women’s boardinghouse.25

  Violent incidents multiplied. In early September, a striker and a deputy were killed during a gun battle in Trion, Georgia. In Lowell, Massachusetts, 2,500 workers rioted. At Honea Path, South Carolina, strikebreakers and deputies killed seven pickets and wounded many more. In Saylesbury, Rhode Island, a three-day pitched battle occurred between pickets who were attempting to shut down a plant and authorities armed with shotguns and machine guns. At Woonsocket, Rhode Island, police and National Guardsmen fought with a crowd of 8,000 workers before the city declared martial law.26

  The violence prompted a federal board of inquiry to urge the UTW to end the strike—and the union complied. The government appointed committees to investigate the stretch-out complaints, and the Federal Trade Commission studied whether the industry could afford higher wages. President Franklin Roosevelt implored the companies to rehire strikers without discrimination, but in the end few companies complied. Despite the clear defeat, UTW officials asserted that it had been an “amazing victory.” The end result was to leave a generation of millworkers embittered and disillusioned with unionism. In the words of one Kannapolis local union member: “Our local is gone and it don’t seem there is any use to try now as they have lost faith in the union. . . . It looks like Cannon Mills are running the whole thing. We want to know if they run the whole country.”27 In the late ’30s, the Congress of Industrial Organizations (CIO) set up a Textile Workers Organizing Committee, envisioning rapid unionization of the hundreds of thousands of workers in the field. But it had little success in the South, where workers were suspicious and fearful. 28

  The 1930s also witnessed another sweeping change in southern textiles: the beginning of the end of mill villages.

  Disparagement of such villages dated from at least the turn of the twentieth century, when critics began faulting their rigid caste-bound social structure and frowned upon the companies’ restrictions on occupants’ personal lives and occupations. The National Industrial Recovery Act’s textile code echoed the criticism with suggestions that perhaps the southern mills should get rid of their villages.29 Moreover, the automobile meant that workers no longer had to live within walking distance of the factory. As the powerful Burlington Co. began buying up bankrupt mills, it declared that it didn’t want the accompanying villages—and the old owners began selling the worker houses to their inhabitants. By 1939, a dozen companies had sold at least thirty villages, and by the 1940s, some sixty villages in Virginia, the Carolinas, and Georgia containing 7,000 homes had been similarly disposed of. After a pause during World War II, the trend resumed in the late 1940s.30

  One holdout, of course, was Cannon. Instead of disposing of the company’s property in the town of Kannapolis, Charles Cannon—inspired by a trip to Colonial Williamsburg in Virginia—decided to develop the place even more, upgrading the town’s business district. Over a period of many years, every building in downtown Kannapolis was refashioned in the Georgian style.

  The town also featured sixteen churches, including two for the town’s five hundred black residents, although there was no Catholic church. Liquor wasn’t available in any restaurant or other establishment. Overall, the result wasn’t
to everyone’s liking: In 1933 a reporter from Fortune magazine found the town of 15,000 inhabitants to be “a medieval city” standing “aloof and self-contained in the midst of an empty country, suspicious of all strangers, loyal to its feudal lords.”31

  During the next thirty-odd years, not much changed in either the town or the textile-production process. Just after World War II, one hundred prefabricated houses were added to the stock of around 2,000 company-owned houses in a section that became known as G.I. Town. Aside from church, the townsfolk’s primary recreation centered around the large, company-subsidized YMCA, located adjacent to the company headquarters: Its 12,000 members paid annual dues of $2, or $1 for youths.

  In 1962, the company celebrated its seventy-fifth anniversary, saying that its annual sales had reached $231 million. Two years later, in the first significant alteration in production for years, it announced plans for a new highly automated facility, which would become known as plant 16. Recognized as the largest textile mill built since World War II, it added 550 workers to the more than 25,000 employed by Cannon in Kannapolis.

  Notably, the southern civil rights movement had little impact on Kannapolis. The Y’s membership remained all-white until 1966. With only 15 percent of the citizenry being African American (and only fifty Cannon houses occupied by blacks), the town had no NAACP chapter. The Ku Klux Klan, on the other hand, was well-established and provided the lead contingent in the town’s 1968 Christmas parade.

  The following year, the U.S. Justice Department sued Cannon to force integration of company housing. But the legal papers included no formal complaints by Cannon workers. A front-page Wall Street Journal article that profiled Charles Cannon, his company, and the town asserted that Cannon “has the support of most residents in town who enjoy living under his paternalistic eye.” The article even quoted a retired black janitor who’d worked in the plant, noting: “There’s not a thing I could say against Mr. Cannon. It’s a fact he has a one-man town, but he’s a good man.”32

  Charles was now chairman, having retired as president in 1962. His wife died in 1965, and he lived alone with a police dog as his only companion.

  In 1971, Cannon Mills signed a consent decree, ending the federal lawsuit. The agreement admitted no wrongdoing and simply said that the company would from that time not discriminate in employment matters or in housing.

  A few weeks later, Charles suffered a stroke while sitting at his desk beneath a large portrait of his father and surrounded by small replicas of artillery field pieces. He refused a stretcher or an ambulance, but allowed the company president, Don Holt, to help him to his car and on to the hospital, where he died after a few hours. He was seventy-eight.33

  At the time, Cannon Mills was the largest employer in North Carolina, with 24,000 workers. Kannapolis remained unincorporated—its citizens disenfranchised when it came to local issues—an alien presence in the modern world. If incorporated, the town would become North Carolina’s tenth-largest city.

  For those fearful of change, the signs were increasingly ominous. Symbolically, the Crescent Ltd., the last privately operated, overnight luxury train in the United States, discontinued its stop in Kannapolis right after Charles’s death. Out near I-85, shopping centers first began appearing in the 1960s, posing a clear danger to all small-town enterprises.34

  Signs abroad were equally menacing, as all U.S. textile production was endangered. Since the industry requires little skilled labor, textiles are one of the first products to which developing nations turn. And just as the South had used cheap labor to steal jobs away from New England, so were such places as Asia and Latin America now taking textile work away from the South.

  Cannon and other manufacturers stayed one step ahead of organized labor for decades. Beginning in the 1950s, the Textile Workers Union of America made efforts to organize—and Cannon generally turned these efforts away, frequently doling out small wage increases to keep its workers relatively content.35 When the union finally forced an election in 1974, workers in fifteen Cannon plants voted against it, 8,473 to 6,801, with many abstentions.36

  But within thirty years, there would be no company left to fight over.

  The company’s once-high-quality products had lost their luster by the 1980s, becoming the stuff of bargain stores. The town itself was looking increasingly threadbare. It was at that moment, in 1982, that corporate raider David Murdock launched an offer of $413 million for all 9.38 million shares in the company. Charles’s son William agreed, and Cannon, along with its 660 acres of surrounding property, became a privately held outfit. Murdock said he intended to upgrade the company’s facilities across the South and redevelop the community. He built a spacious guest lodge in Kannapolis to house business guests, along with a new YMCA. And he began selling the worker housing to its occupants, for an average of $20,000 per house. Kannapolis’s citizens voted to incorporate the town in 1984, and within a few months, they elected its first city council.

  Three years later, in 1985, Murdock abruptly sold Cannon to Fieldcrest Mills for only $250 million. A dozen years later, Fieldcrest Cannon, as it had become known, was itself sold for $700 million to Dallas-based Pillowtex Corp., which in turn filed for Chapter 11 bankruptcy protection within three years. Pillowtex announced its complete bankruptcy in July 2003. Suddenly 4,340 Kannapolis residents—all that remained of textile employees in the town—found themselves unemployed.37

  The former Cannon headquarters was demolished in 2005, and the site was taken over by the North Carolina Research Campus, the brain-child of Murdock, who remains active in the town. A variety of universities say they will have facilities at the complex, including the University of North Carolina, Duke, and Rowan Cabarrus Community College.38 If all of this happens, Kannapolis could become a center of research in areas from nutrition to agriculture and medicine. It would be quite a transition.

  Meanwhile, over the very same span of years that saw Kannapolis’s rise, industrial America’s preeminent enterprise fathered a very different company town, halfway across the continent on the shores of Lake Michigan. That startling, near-instant metropolis would be the crowning achievement of America’s company-town builders.

  CHAPTER 5

  The Magic City

  Made-to-order cities are the spectacular civic by-product of the new industrialism. Accustomed though Americans of this day are to rapid accomplishment, not one who visits the suddenly created city of Gary fails to experience a new thrill of amazement.

  —GRAHAM ROMEYN TAYLOR, Satellite Cities (1915)

  In 1904, Elbert H. Gary determined that U.S. Steel, of which he was chairman, was in need of vast new expansion. The huge trust had been created only three years before, when banker J. P. Morgan, Carnegie Steel executive Charles M. Schwab, and others had pulled together “the combination of combinations,” embracing such large outfits as Federal Steel and Carnegie Steel, and representing 65 percent of the American steel industry. And already, demand for steel had outpaced U.S. Steel’s resources, benefiting its competitors. “Judge” Gary, as he was always called thanks to his two terms as a county jurist, delegated the corporate expansion to Eugene Buffington, president of the subsidiary Illinois Steel. And like George Pullman a decade earlier, Buffington and his colleagues decided to build on the edge of Chicago’s spreading metropolitan region.

  The corporation considered locations in Waukegan and South Chicago, but the final decision favored 9,000 acres on the Lake Michigan shore across the state line in Indiana. The barren site offered plenty of elbow room at a good price, along with water, railroad access, and proximity to the Chicago labor pool. The corporation went on to build the largest steel mill in the nation there for a new unit called Indiana Steel, along with facilities for corporate holdings American Bridge, American Sheet and Tin Plate, American Car and Foundry, American Locomotive Works, American Sheet and Wire, National Tube, and Universal Portland Cement.

  And it built a new city to support the works. Gary, Indiana, as the judge allowed the
community to be named, would come to be the largest company town ever constructed in the United States. Gary’s warp-speed incarnation led its promoters to dub it “the Magic City”—a moniker that others, including the mixed-industry town of Middlesborough, Tennessee, had tried to claim but that seemed to fit Gary best of all.

  Like most steel men, U.S. Steel’s executives were not eager to become involved with housing for employees. “We are manufacturers, not real estate dealers,” the head of a large Pittsburgh steel outfit haughtily announced in 1908. “The most successful places in the United States are those farthest removed from suspicion of domination or control by an employer,” averred Buffington. At first, company executives thought they could simply lay out the grid, supply a sewer system and gas lines, and let the community itself take care of the actual residential construction. Before long, though, the corporation was driven to build many residences, since undeveloped lots weren’t selling particularly well and home-building hadn’t taken off. In the end, U.S. Steel built “half a city,” in the words of writer and social reformer Graham Romeyn Taylor. This inclination to abstain from residential building meant Gary was dissimilar from many company towns that had come before, including Lowell, Pullman, Hershey, and even southern textile towns or the towns of the coal belt.

  In his article for The Survey, a journal published by the Charity Organization Society of the City of New York, a social-welfare group, Graham Taylor wasn’t altogether flattering toward Gary. But neither could he help but be impressed: With a population nearing 50,000 only nine years after the first brick was laid, Gary was “probably the greatest single calculated achievement of America’s master industry,” in Taylor’s opinion.1